How do we know China is over-investing? Because it's throwing money at the wrong things, says Michael Pettis:

It is hard for me to be very optimistic that the success of electric cars in China will increase the wealth of the Chinese people. It seems to me that investment in high-prestige areas like electric cars, solar panels, and so on for technologically backward countries with low worker productivity may be a little like investment in the space program or in the Olympics. They may have positive political and even psychological returns, but on a strictly economic basis they reduce overall wealth and exacerbate domestic imbalances.